The ASX200 finished a choppy week up +1%, a solid result given the index gapped down ~2% on Monday. Volatility was elevated, with three sessions posting 100-point intraday swings—moves that would typically define a month. Geopolitics remain front of mind: the US and Israel struck Iranian nuclear and steel facilities on Friday, prompting retaliation across the Persian Gulf. The escalation followed President Trump’s delay of a deadline for Tehran to reopen the Strait of Hormuz. Markets remain on edge, with Brent Crude above $US113 the key focus, the prolonged conflict is increasing the risk of more meaningful damage to the global economy.
This week, the materials stocks dominated the winners’ enclosure, with lithium names front and centre as investors reconsidered alternatives to fossil fuels, while tech again carried the wooden spoon as the “AI Disruption Trade” reared its head again:
Winners: PLS group (ASX:PLS) +21.8%, Liontown (ASX:LTR) +21.3%, IGO Ltd (ASX:IGO) +16.5%, Light & Wonder (ASX:LNW) +11.8%, Temple & Webster (ASX:TPW) +11.4%, Mineral Resources (ASX:MIN) +9.7%, and Zip Co (ASX: ZIP) +9.3%.
Losers: NEXTDC (ASX:NXT) -11%, WiseTech Global (ASX:WTC) -10.5%, Catalyst Metals (ASX:CYL) -8.8%, National Australia Bank (ASX:NAB) -7.9%, Endeavour Group (ASX:EDV) -7.7%, DroneShield (ASX:DRO) -6.5%, and WEB Travel Group (ASX:WEB) -6.3%.
The market remained focused on developments in Iran, with the worst supply disruption in oil market history not improving:
- The ASX started the week under pressure on escalating Iran war concerns, though buyers stepped in, lifting the index well off its lows.
- Sentiment improved into Tuesday/Wednesday after President Trump flagged a potential five-day delay to strikes on Iranian energy infrastructure, signalling a willingness to negotiate.
- Oil prices eased midweek, with Brent Crude falling after reports that the US presented Iran with a 15-point peace proposal, helping equities rally.
- Domestically, February CPI printed slightly softer than expected, offering reassurance that inflation was easing pre-conflict.
- The market faded into the weekend, with Iran and the US still far from any ceasefire agreement.
Overseas markets closed the week on edge, reflecting nervousness ahead of another uncertain weekend with US stocks enduring their longest weekly decline since 2022. In Europe, the German DAX fell 1.4%, while the UK FTSE fared better, slipping only 0.1%. In the US, the tech-based NASDAQ closed 1.9% lower, while the broad-based S&P 500 closed down 1.7% with the energy names again the standout in the winners enclosure as oil punched ~5% higher.
We’ve maintained a bullish bias in March, expecting the ASX to be higher on June 30th and at Christmas, although the war-induced correction has been more aggressive than we expected. However, the software stocks are one piece of the puzzle, still pointing to further weakness, but after last week’s 3.6% fall, the US sector is homing in on our downside target in rapid fashion.
- The SPI Futures are calling the ASX200 to open down 0.8% on Monday, following the weak session on Wall Street although the miners are likely to hold firm if they follow the US market.
